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Venezuela: Where things stand after the May 20 presidential vote

A young woman votes during the presidential elections, in Caracas on May 20.

Defeated Venezuelan presidential candidate Henri Falcón announced on May 20 that he would not recognise the legitimacy of that day’s elections. Nicolás Maduro’s re-election was generally expected, though his 68% of the vote was higher than what most polls predicted. So was the 54% abstention among registered voters, due in large part to the opposition’s Democratic Unity Roundtable (MUD) call for an electoral boycott.

The refusal by Falcón to recognise the results bodes poorly for Maduro’s new term as president. The consolidation of a moderate bloc within the opposition that Falcón represented — which recognises the government’s legitimacy — would have significantly cut into the strength of the more intransigent or radical parties on the right and provided Venezuelan politics with much needed stability.

Maduro needs political capital and a degree of support from outside the Chavista movement to tackle pressing problems such as four-digit annual inflation, an appalling deterioration in the standard of living of both popular and middle sectors, and oil industry mismanagement resulting in a decline in production.

Two urgent tasks loom as major challenges: deepening efforts to combat corruption in the country that began in the latter months of 2017; and bringing the nation’s officially set prices, including foreign exchange rates, within closer reach of production costs and market prices.

Given the nation’s intense polarisation, bold and necessary government measures such as these are bound to generate popular or bureaucratic resistance that the opposition will exploit.

Contributing to the volatility is the hostile position assumed by Washington, the European Union and Venezuela’s neighbours.

In August 2017, the United States administration prohibited the purchase of Venezuelan state bonds and the Venezuelan-owned, US-based CITGO petroleum corporation’s remittance of profits, and then banned transactions involving Venezuela’s new cryptocurrency, the Petro.

The US administration’s characterisation of the Maduro government as a tyrannical dictatorship and a veritable narco-state undoubtedly influenced the MUD’s call for an electoral boycott, even after Democratic Action (AD) Secretary General Henry Ramos Allup announced his presidential candidacy in January.

Three-way split

Falcón’s refusal to recognise the results was far from inevitable. Indeed, Falcón emerged as a major national leader on October 15, 2017, when he acknowledged his defeat in his bid for re-election as governor of Lara, unlike other opposition gubernatorial candidates.

A concurrent event appeared to signal a major break-off from the opposition bloc, which over the previous two decades has, for the most part, denied the legitimacy of both the Hugo Chávez and Maduro governments. Four of the opposition’s five elected governors, all belonging to AD, disobeyed party orders by agreeing to take their oaths as elected officials in front of the Chavista-dominated National Constituent Assembly.

Behind the conflict among the anti-Chavistas, there is a glaring fact: Venezuela is divided in three, not two, camps — the radical opposition, the Chavistas, and a middle ground lacking in well-organised leadership.

This middle ground — a sizeable percentage of the population opposed to Maduro — firmly rejects the type of street protests (guarimbas) carried out in 2014 and last year by the hard opposition that resulted in widespread disruption and violence.

These Venezuelans are equally opposed to the US economic sanctions, imposed with the encouragement of the radical opposition. According to the polling firm Hinterlaces, 71% of the population disagrees with sanctions.

The middle ground, which is especially well-defined on the issue of violence, is the space Falcón occupied throughout the campaign.

Maduro’s current priority is to minimise the effects of both the sanctions and the violent resistance to his government so he can enact necessary economic reforms.

‘Economic war’

The issue of sanctions has the potential to unify much of the nation while isolating the radical opposition.

But for this to happen, the government needs to improve its communication strategy by documenting the concrete ways that the sanctions are affecting the economy. Government rhetoric too often harps on the “economic war” against Venezuela in the abstract without going beyond slogans and pointing to the specifics.

Radical opposition leaders flatly deny that the sanctions are at all related to Venezuela’s economic difficulties, which they attribute exclusively to Maduro’s mistaken policies and corruption.

There is much evidence to debunk their claims that the impacts of the sanctions, and the “economic war” in general, are negligible.

In an article in Foreign Policy, Falcón’s chief economic advisor, Francisco Rodríguez, argued that the sanctions have inflicted considerable harm on the Venezuelan economy.

He pointed out that Venezuelan companies such as CITGO have been unable “to get US financial institutions to issue routine trade credit since sanctions were imposed” and that the measures risk “turning the country’s current humanitarian crisis into a full-blown humanitarian catastrophe.”

Equally or more important than the sanctions is the message that the executive orders issued by US presidents Barack Obama and Donald Trump sends to private capital. No US company can ignore the seriousness of a statement by its nation’s president that a foreign government represents an “extraordinary threat to national security,” in Obama’s words, or that it is involved in drug trafficking and money laundering.

These statements have undoubtedly contributed to the disinvestment that has wreaked such havoc on the Venezuelan economy.

In a similar vein, Miami’s El Nuevo Herald revealed that National Assembly president and leader of the radical opposition Julio Borges systematically contacted banks throughout the world to enhance the effectiveness of the US-imposed sanctions. Borges warned financial institutions that “doing business with a dictatorship that violates human rights” would convert them into “accomplices” and would endanger their “image.”

One of the multiple effects of Washington’s campaign against the Venezuelan government is the corporate exodus of recent years, which includes Clorox, Kimberly-Clark, Ford, Colgate Palmolive, General Mills and General Motors.

Although the companies blamed the Maduro administration for their decision, political and economic motives in situations like these are always mixed and difficult, if not impossible, to untangle.

Acknowledging the problem of inefficiency, corruption and mismanagement should not detract from the recognition that Washington’s hostile actions have impacted the Venezuelan economy in major ways.

The oil industry is a case in point: Attorney General Tarek William Saab, who was appointed in August 2017, has documented unethical practices in the industry, which have resulted in numerous arrests of top executives of the state oil company, PDVSA.

But the company has also been a victim of the sanctions, affecting its relationship with major oil service providers such as Baker Hughes, Halliburton and Schlumberger. To avoid a direct relationship with PDVSA, these US companies now work through an intermediary firm that makes use of their equipment and personnel while taking a fair cut of the profits from Venezuela.

Chevron, the only US oil company with a major presence in Venezuela, has refrained from making significant investments in the recent past.

Moderate vs radical opposition

Following the May 20 elections, various opposition spokespeople called for unity among the anti-Chavistas. Achieving such unity, however, will not be easy, given the profundity of the differences separating those who called for an electoral boycott and those favouring participation.

A look at the differences sheds light not only on the chasm between opposition “moderates” and radicals, but also the different ways ordinary Venezuelans view key political issues. The contrast between the two camps also suggests the feasibility of an understanding or convergence involving the Chavistas in power and the opposition moderates, at least on certain issues.

Boycott versus participation: The radical opposition, the US administration and much of the corporate media labelled the Venezuelan electoral process “fraudulent,” which refers to manipulation in the counting of votes. Over the years, the opposition has used the term loosely.

Nevertheless, the nation’s voting system is based on simultaneous manual and electronic procedures, as well as auditing in more than 50% of the voting centres. Furthermore, on May 20, as in past elections, opposition representatives at all voting centres signed documents validating the process.

Falcón’s supporters, fearful that the use of the term “fraud” would discourage voting, limited their concerns to irregularities and the lack of a level playing field.

The secrecy of the voting process was never seriously questioned; Falcón’s objections were not focused on the National Electoral Council (CNE) adding false votes for Maduro, but rather voter manipulation.

Falcón and others claimed that assisted voting conducted for the elderly lent itself to dishonest practices, and that some Chavista stands, known as “puntos rojos” (red points), were located within 200 metres of voting centres, violating electoral norms. The one accusation that may have influenced results was the effort to sway people by promising them a bonus if they went to the polls.

No to impunity: The radical opposition openly calls for the purging of the state apparatus to eradicate corruption at all levels. In contrast, Falcón’s strategy was clearly designed to win over discontented Chavistas.

Falcón pledged he would decree a moratorium on layoffs in the public administration while his party indicated that, if elected, he would consider retaining Maduro’s defence minister Valdimir Padrino López, a Chavista stalwart.

The road to power: The radical opposition’s decision to boycott the elections reflects its scepticism about the feasibility of achieving objectives, including neoliberal structural reforms, through electoral means.

Underlying the MUD’s hardline position on elections was its strategy for the complete undoing of the changes implemented by Chávez and their replacement with neoliberalism, shock-treatment style. Popular resistance to drastic change of this nature could not be discarded.

Among the measures proposed was to privatise strategic sectors of the economy that the current constitution, ratified in 1999, prohibits.

This approach, which implied a major shakeup — possibly through forceful means — contrasted with Falcón’s, which emphasised peaceful change and was concerned an electoral boycott would lead to violence.

International “solidarity”: Falcón and his supporters questioned, albeit timidly, the MUD’s emphasis on foreign support for their cause and adamantly ruled out foreign military intervention, while insinuating that those boycotting the elections were leaving such an option open.

Limited options

José Vicente Rangel, who occupied various top positions under Chávez, including the vice presidency, has long been the foremost advocate of promoting dialogue with sectors of the opposition, a strategy that does not rule out measures that inspire and mobilise the Chavista rank and file.

The issue manifests itself through an internal rivalry within the governing United Socialist Party of Venezuela (PSUV) between the two main long-standing factions headed by Maduro and Diosdado Cabello. Cabello is a hard-liner on Chavista relations with the opposition.

Maduro’s call for a national dialogue is nothing new: the proposal dates back to the months of the guarimba protests in 2014.

But the emergence of a new, more moderate reference point within the opposition camp as a result of the Falcón candidacy enhances the plan’s chances of success. Indeed, Enrique Ochoa Antich, a leading Falcón supporter, indicated willingness among those who participated in the campaign to take part in the dialogue proposed by Maduro.

Throughout the campaign Falcón performed a balancing act between demonstrating to the opposition that he was not soft on the government and trying to attract discontented Chavistas. The future of his movement is very much up in the air.

The neoliberal formulas put forward by Falcón including mass privatisation, agreements with the International Monetary Fund and the dollarisation of the economy, are not common denominators for the Chavista government to build on.

But there is one key issue that can bring the two sides together. If Maduro attempts to link the nation’s price structure to market conditions to combat rampant inflation, he will need political support. Such an effort would be perfectly compatible with Falcón’s economic positions.

Maduro’s options are limited given Venezuela’s isolation on the international stage, the direness of the economic situation, and the level of dissatisfaction in the nation. But he needs to take advantage of the moment; solutions to the nation’s pressing problems require bold moves.

In the past, Maduro has failed to take advantage of favourable moments, but after five years as president he may have learned the importance of timing. Whether this is the case will be evident in the coming days.

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